Thursday, November 23, 2006

Microsoft-Novell: Who Wins, Who Loses?

Many observers believe that the deal between Microsoft and Novell will benefit Microsoft in its case with the European Union over antitrust penalties imposed by the European Commission, with the fact that Novell is a prominent antagonist in the case not lost on critics.

The business and technology partnership unveiled recently by Microsoft and Novell is a multi-dimensional union that reaches deep into the open-source community, slaps at rivals of both vendors and could potentially aid Microsoft in its European Union lawsuit.

Microsoft and Novell, whose dislike for each other is nearly as old as the industry, are striving to make it easier for customers to run, integrate and manage Linux and Windows environments and help open-source developers steer clear of patent and intellectual property concerns.

But the deal also tweaks rivals, including Red Hat, which dominates the Linux market, and VMware, which develops virtualization software that competes with offerings from both Microsoft and Novell. The timing is particularly poor for Red Hat, which is already stinging from a promise by Oracle two weeks ago to undercut Red Hat's lucrative support business. Red Hat's stock is down 17 percent since the announcement.

Microsoft and Novell say the need for the pact was driven by customers who run mixed Windows and Linux environments and need help solving interoperability issues. The companies say they will create a joint research facility staffed with Microsoft and Novell technical experts who can build and test software and work with customers.

"This is a win-win for customers," says Laura DiDio, a research fellow in the application infrastructure and software platforms division at the Yankee Group. "First, by pledging not to assert patent rights against SUSE Linux, Microsoft silences many of its critics in the open-source community. Secondly, by stating they will cooperatively build products that make SUSE Linux and Windows Server coexist, Microsoft and Novell are guaranteeing interoperability."

That promise hinges on an agreement by the vendors to focus on virtualization and to jointly develop a virtualization offering for both Linux and Windows that would allow either to be the host or guest operating system.

While few details were provided, Novell CEO Ron Hovsepian said the emphasis would be on para-virtualization technology, which ensures tight integration and better performance by requiring an operating system to be explicitly ported to run in the virtualized environment.

Although Hovsepian said the virtualization offering would allow either Linux or Windows to be the host operating system, he did not specify if it would apply to both desktops and server virtualization.

Users had a mixed reaction.

"It is great to see these leaders combining to solve key compatibility issues," says Randy Cowen, the CTO of Goldman Sachs, who appeared on stage with Hovsepian and Microsoft CEO Steve Ballmer during the press conference in San Francisco.

But some questioned the union and its effects on the open-source community.

Jim Klein, director of information services and technology for Saugus Union School District in Los Angeles, wrote on his blog: "The biggest benefactor of this deal is Novell, not the open-source community or the customer, as Novell's Hovsepian and the spin doctors would have us believe. And we as a community should stand against it."

Klein said he sees the Microsoft/Novell partnership as the greatest threat to open source that community has ever seen. "As long as Microsoft is promoting the use of SUSE Linux, Novell has a vested interest in supporting Microsoft's perspectives in the marketplace," Klein says.

Industry veterans say the deal also is a shot at common Microsoft/Novell foes such as VMware, an affiliate of EMC.

"Microsoft is now willing to partner with a provider of a Linux guest [operating system] to offer an X-platform guest solution for its Virtual Server, which previously was one of the strengths of VMware," says Tom Kemp, cofounder of Centrify, which develops software to integrate Windows with Linux distributions, including Novell's SUSE.

The other major portion of the agreement focused on patent infringement and intellectual property rights, which both companies sought to protect under a contract that took six months to hammer out.

Open source and Linux developers have feared that features of the Linux kernel and open-source applications may tread on the patents owned by major vendors and bring crippling reprisals.

Microsoft said it will provide a covenant not to assert its patent rights against customers who have purchased SUSE Linux Enterprise Server and other covered Novell products. Meanwhile, Novell will provide an identical covenant to customers who have a licensed version of Windows or other covered Microsoft products. The patent agreement runs until 2012.

Patent fears have given rise to such services as the patentcommons.org Web site run by Open Source Development Labs, which is a group focused on promoting the use of Linux in corporate networks. Two years ago IBM tried to assuage fears about patent claims by giving the open-source community free use of 500 of its patents, putting additional pressure on Microsoft to play along.

Microsoft now says it will not assert its patents against individual noncommercial open-source developers, nor will it assert its patents against individual contributors to OpenSuSE.org whose code is included in the SUSE Linux Enterprise platform, including both the server and desktop version.

But critics hammered the patent part of the agreement saying it covers only noncommercial developers and leaves out commercial developers whose work could pose a threat to Microsoft on the desktop and server.

Other parts of the overall agreement include integrating management wares that support hybrid Windows and SUSE Linux environments, including making it easier to federate Microsoft's Active Directory and Novell's eDirectory. Those platforms form the core of each vendor's identity management platforms.

While the pair did not go into specifics, it is clear the interoperability will include Novell's ZenWorks management platform and Microsoft's family of System Center products.

In the area of document format compatibility, the companies will focus on interoperability between Microsoft's Office and Novell's OpenOffice desktop productivity applications. The two also will focus on developing translators to improve interoperability between OpenXML from Microsoft and the Open Document Format, which is widely embraced in the open-source community.

In addition, Microsoft said it will work with Novell and contribute to several open-source software projects, including those focused on Office file formats.

Many observers believe that the deal will also benefit Microsoft in its case with the European Union over antitrust penalties imposed by the European Commission. The fact that Novell is a prominent antagonist in the case is not lost on critics.